Will Purcell comments:
Diamonds & Specialty Minerals Summary for April 15
2013-04-15 13:05 ET - Market Summary
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by Will Purcell
The diamond stocks box score for Monday was a frightening 23-104-120. The TSX Venture Exchange tumbled 64 points to 958 while polished diamond prices held steady. Angola's state-owned diamond company, Endiama, will schmooze foreign diamantaires in a bid to boost diamond exploration. The country, which has huge diamond deposits, produced nearly nine million carats worth $1.2-billion last year despite decades of on-again off-again murder and mayhem. Diamond miners have not come under deadly attack since a raid at Yetwene in 1998 killed eight, but there still are risks, not the least of which is having one's pockets picked by the Angolan government. Endiama crows about a new mining code cutting taxes to 25 per cent from 35 per cent, but it says nothing about the carried interest it receives whenever a foreign company gets a licence to explore in Angola.
George Read and Kenneth MacNeill's Shore Gold Inc. (SGF) closed unchanged at 17 cents on 60,000 shares. The company's proposed $2-billion mine at Star-Orion South in central Saskatchewan is stalled, pending a brave investor or partner fronting the cash. Meanwhile, Mr. Read, Shore's endless fount of good cheer, is touting the "regional potential" of several other Fort a la Corne kimberlites, including Orion North, Orion Centre and Taurus. According to Shore, one of the three Taurus pipes tops 0.11 carat per tonne, as does one of three Orion North pipes. Mr. Read needed some unusual ideas to tout those grades, because actual drill sampling yielded raw grades around 0.05 carat per tonne. First, he tried a "factorized grade," multiplying the real grade by a seemingly magical number: 1.62. This still leaves the pipes looking uneconomic, but Mr. Read has a back-up theory that does better. He says the best measure of the Fort a la Corne pipes is a grade derived by considering just retained kimberlite, not the total amount of rock drilled -- the idea being that the fine material washed away contained an equal proportion of ground-up diamonds. Perhaps he is right, but De Beers rejected the idea when it was exploring the pipes years ago. The low grades were the main reason De Beers sold its 42-per-cent interest in the project to Shore Gold for $180-million in 2006, after trying unsuccessfully to curb the eager exploration plan of Shore Gold, then its equal partner. Seven years ago, stock guru John Kaiser deemed Shore a "slow motion train wreck in the making" because of its unorthodox ideas. A quick glance at Shore's chart suggests if he was wrong, it was only about the speed of the wreck.
(Oldduffer gets credit for posting this on another site. It's worth posting here for discussion.........some may not agree with Mr Purcell or Mr Kaiser but even the extreme pom pom pumpers would have to agree these two gentleman called it right. LONG before the 2008 global meltdown, which the pom pommers convienently like to blame for Shore's lack of performance.) GLTA Pickinbottles